Welcome to the MBIA Incorporated Third Quarter 2014 Financial Results Conference Call. Thank you. I would now like to turn the call over to Greg Diamond, Managing Director of Investor Relations at MBIA. Please go ahead.

Thank you, Christie. Welcome to MBIA's conference call for our third quarter 2014 financial results. After the market closed yesterday, we posted several items on our website including our financial results press release and our third quarter 10-Q and operating supplements. We also posted two 8-Ks, one for the financial results and related disclosures, and one for the Board’s approval of a new share repurchase authorization. In addition, the statutory financial statements for MBIA Insurance Corporation and National Public Finance Guarantee Corporation, as well as updates to our insured portfolio listings were also added to the website. Please note that anything said on today's call is qualified by the information provided in the company's 10-Q, 10-K and other SEC filings, as our company's definitive disclosures are incorporated in those documents. Please read our 2013 10-K and third quarter 10-Q, as they contain our most current disclosures about the company and its financial and operating results. Those filings also contain information that may not be addressed on today's call. Also, we will be referencing the non-GAAP terms in our remarks today. The definitions and reconciliations of those terms may be found in the glossary of our quarterly operating supplements and in the financial results press release that we issued yesterday. The recorded replay of today's call will become available approximately one hour after the end of the call and the information for accessing it was included in yesterday's financial results press release. Now I’ll read our Safe Harbor disclosure statement. Our remarks on today's conference call may contain forward-looking statements. Important factors such as general market conditions and the competitive environment could cause our actual results to be materially different than the projected results referenced in our forward-looking statements. Risk factors are detailed in our 10-K, which is available on our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements. The company also undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is no longer accurate. For our call today, Jay Brown, Bill Fallon and Chuck Chaplin will provide some brief introductory comments. Then they will address questions during the question-and-answer session that will follow. Now, here is Jay.

Thanks, Greg, and good morning everyone. As with last quarter, we made additional progress towards our objectives around increasing profitability further reducing volatility and reestablishing our leadership position in domestic municipal bond insurance. Regarding our financial results, we had adjusted pretax income of $95 million, compared to a loss of $188 million in last year’s third quarter. And again like last quarter, we had some non-ordinary course of business items that had affected our results this quarter, which Chuck will take you through in a moment. But we are beginning to see some sustainable positive effects. The most prominent of these are first, we are realizing the benefits of significant expense reduction efforts over the past year. Operating expenses excluding deferred acquisition cost amortization were $46 million versus $71 million in last year’s third quarter. Second, loss payments on our second-lien RMBS exposures resulted in net cash inflow to MBI Corp of $18 million. While we’ve had two straight quarters of favorable results here, and we ultimately expect a substantial net recovery, we could still see more periods of net outflows along the way. We wrote our first primary insurance policy since National, which was created in 2009. In connection with the refinance of the Detroit Water and Sewer Department’s debt National wrapped $300 million of new debt, and out net exposure to the DWSD was reduced by $432 million. In part due to the net recoveries on RMBS and lower operating expenses, our operating cash flow was positive in the quarter – the second quarter in a row. We have also had two consecutive quarters of increases in adjusted book value, substantially aided by the reduction reserves against the portion of our deferred tax asset in the second quarter and for uncertain tax positions in the third quarter. While…

Thanks, Jay. In our second full quarter after achieving competitive ratings, we go to our first primary policies in conjunction with the resolution of the Detroit bankruptcy, but there is more to the story than that. We believe that the Detroit bankruptcy remediation makes several important points about the value of bond insurance and the value that National specifically brings to the table. First, bondholders benefiting from National’s rap missed no principle or interest payments during the bankruptcy, even though the city was not making payments. The resolutions of the unlimited tax yield and the secured water and sewage department debt from the fundamental places of those obligations in the city’s capital structure, which had been challenged early in the process. Second, the issue was benefited from more efficient execution by using National’s insurance at issuance. Remediation of our exposures to Puerto Rico is at an early stage. Our total exposure declined by $290 million since June 30 due to pay down that took place at the very beginning of the third quarter. Commonwealth has cited an advisor to review prepays operations and is moving towards a restructuring of the assets and liabilities of the Puerto Rico Highways and Transportation Authority that we believe we’ll improve its ability to service its debt. Nothing that has happened that changes our fundamental view, that the situation remains uncertain and that the quality of operational management and fiscal leadership and the Commonwealth’s macroeconomic growth rates will be the primary factors that determine the ultimate outcome. With respect to our marketing efforts, we have reviewed in bit on many more transactions in both the competitive and negotiated markets during the quarter. With interest rates continuing at low levels, our primary competitor continues to be the uninsured market, but we have seen insured penetration by…

Great, thanks, Bill. As usual, I’ll make some comments about our consolidated financial results and the segments and provide some information on the balance sheet and liquidity positions of our major legal entities before we open it up for your questions. Our measures of performance were all favorable in the quarter. This is the second quarter in a row where our net income and adjusted pretax income had favorable comparisons both year-over-year and sequentially. And adjusted book value and consolidated operating cash flow improved sequentially. For first, few comments on our consolidated GAAP results. Net income was $173 million compared to $132 million in last year’s third quarter. In the year ago quarter, the biggest driver was a pretax gain of $257 million on the mark-to-market of insured credit derivatives. This year we had only $24 million of such gains. In this year’s third quarter we had pretax revenues excluding the mark-to-market that increased to $267 million from $163 million in the Q3 of 2013 and all pretax expenses declined to $143 million from $249 million last year. In addition, we released a reserve against an uncertain tax position in the third quarter, which contributed to a tax benefit of $25 million this year, compared to a tax provision of $39 million in last year’s third quarter. We also reported a non-GAAP measure, adjusted pretax income that treats all of our insurance policies using an insurance accounting model. It provides a useful alternative view of our financial results. As Jay referenced, we had adjusted pretax income of $95 million in the third quarter of 2014 compared to adjusted pretax loss of $188 million in last year’s third quarter. There were a few effects in this result that are difficult for us to predict to occur infrequently. One, foreign exchange effects…

Thank you. (Operator Instructions) Your first question comes from Brett Gibson of JPMorgan. Brett Gibson – JPMorgan: Yes, good morning, gentlemen. Can you hear me, okay?

Just fine. Brett Gibson – JPMorgan: Very good and good morning. So I wanted to start out with the buyback and I guess a direct questions here, related to this buyback, given everything going on with Puerto Rico, the deficit of assets to liabilities at the Holding company and obviously the continued deferrals interest on the surplus notes, can you help us understand what gave you in the Board comfort to put up this authorization?

Good, the Holding company, yeah if you look at our financial results over the past year we’ve seen improvements in financial position, capitalization and liquidity pretty much across the board, across National, and MBIA Insurance Corp. and the Holding company. Though Holding company today is in a position where again we think that we have meaningful financial flexibility and then and we believe that’s important that as we had financial flexibility that we’re deploying it to create shareholder value overtime. And as a result, we do think that it’s proven at this point to indicate that we have the flexibility to buy back some shares to the extent that that is the highest best use of that capital. You mentioned MBIA Insurance Corp. and its liquidity position again it’s improved, we think that the most important thing that need to happen there in terms of making that liquidity position more permanent is to more fully collect on the excess spread assets that as you see we are starting to collect on in a positive way in the past two quarters and ultimately to collect the recovery from Credit Suisse. And again we’ve discussed National’s position relative to our Puerto Rico exposure and we feel very comfortable with our capital and liquidity position there as well. Brett Gibson – JPMorgan: Okay, very good, thank you. And then just I mean further follow on to that, what can you tell us of the timing of the buyback, what is in your mind, will the company consider executing an accelerated share repurchase or should we expect something to be a little slower and more steady over time.

I would say that there is no timeframe that we’ve committed to, and there’s no limit on the program as well in terms of time. Brett Gibson – JPMorgan: Okay, and lastly, I just wanted to address, what you talked about with the projected inflows from excess spread recoveries and how important that is to MBIA Insurance Corp. specifically, can you talk about the embedded assumptions that go in to the number that you have on the -- booked on the balance sheet, I think for the second-lien, which is about 595. Can you talk about the trends that you’ve seen from prepay rates and draw rates? And what they need to be to realize that amount over time?

Yeah, I think the most important factor that we have been looking at over the past year has been the impact of prepayments on the ultimate collection level. If you go back to second quarter 2013, as we saw rates begin to rise sort of at the time of the temper tantrum, we had the view that that rising level of rates and rising mortgage rates would stop the flow of voluntary prepayments in our second-lien portfolio and that prepay speeds would drop dramatically from the elevated levels that we were seeing and we put in place an assumption basically that prepays went to the levels that we saw pre-quantitative easing. What has happened is that over the few quarter since then we’ve observed mortgage rates which rose then sell again and are at extremely low levels again today and prepay speeds, which initially began to drop reversed core center now at high levels again, so what we’re doing is – in this quarter is modifying our assumption in our models from prepay speeds immediately dropping to the pre-QE levels to prepay speeds remaining at their current levels for an extended period of time and returning to more normal levels over a few years’ time. So that’s what causes the change in the balance sheet value of the excess spread asset in the third quarter in addition to the fact that the balance sheet value came down since we received payments. Brett Gibson – JPMorgan: Great, thank you very much.

(Operator Instructions) Your next question comes from Brian Charles of RW Pressprich. Brian Charles – RW Pressprich: Good morning.

Good morning. Brian Charles – RW Pressprich: I have a couple of quick questions, first of you say in the press release that you commuted an additional $329 million of exposure at MBIA Corp. after the quarter. Do you have any color on what kind of exposure that was and specifically I don’t suppose that it was commutation of high yield CDO 15 or high yield CDO 23, or was it?

They were small and medium sized business loan securitizations. Brian Charles – RW Pressprich: Okay, yeah, fair enough, okay and my other quick question is regarding the balance sheet in MBIA Corp. the statutory balance sheet certainly looks better at September 30 versus June 30 and it looks like you are free indivisible surplus increased from $80 million to $255 million. I don’t know if you have any color on kind of what impact that might have on the regulators view of surplus notes, coupon payments going forward and maybe I have part B on that question too.

Sure, I mean the free indivisible surplus improved substantially basically as a result of net income in MBI Insurance Corp. and the change in non-admitted assets. I think we’ve talked about this a couple of quarters ago that when our UK subsidiary particularly got to be a large share of the surplus of MBI Insurance Corp were required to non-admit a portion of it, but then as Corp has more surplus of its own if you will, we get to readmit a portion of the UK company’s equity that happened in the quarter. We also had contingency reserve releases as a result of the commutations that Jay referred to that also increased the free indivisible surplus to the point where it’s about $255 million at the end of the third quarter. Now obviously, with respect to the surplus notes all payments are strictly subject to the discretion of the Department of Financial Services, as the closest I would come to discussing that would be to say that – and I have said this in my prepared comments that we think that what’s necessary for Corp to really be on a very solid and resilient financial footing is to collect more of the excess spread assets and finally to recover on the Credit Suisse. So we know that that’s out there on the horizon as well.

Yeah I think in terms of the way we really didn’t change our view about either the likelihood or the timing of when surplus interest note payments might begin, we still think there is, as pointed out in the first question, there is a fair amount of volatility left in MBI Corp both in the second-lien portfolio and in a few other remaining credits and that we would expect until those are resolved and as Chuck pointed until we collect on the Credit Suisse that it would be unlikely that there will be any payments or any substantial payments on surplus notes, which is why we continue to believe that it will be a long time, but eventually there will be payments made on those notes as the policy holder claims are first dealt with. Brian Charles – RW Pressprich: Okay fair enough. And then one final just follow-up to that, I know in previous quarters, you have discussed addressing the surplus notes in some forms perhaps, with the surplus notes holders, I don’t know if you have any color on that, whether or not you have been in communication with various holders and discussing different strategies on how to address the notes.

We have had some additional analysis and some discussions this quarter. We continue to have a fundamental difference in terms of our views of the net present value essentially the current market value of those, which reflected in the market and our view in terms of how timing of payments might occur under that yields a very, very different economic answer and it always we have that wider gap suggesting alternative ways to retire those notes isn’t really viable. And so we have got a fundamental economic difference in opinion about how they are valued, it’s very hard to come up with a creative transaction to deal with that. Brian Charles – RW Pressprich: Okay fair enough, thank you.

Thank you. At this time, there are no further questions. I’ll turn the floor back over to Greg Diamond for any closing remarks.

Thank you, and thanks to all of you who have joined us for today’s call. Sorry we have a new – someone entered the queue.

Yes, we do have a question from Michelle (indiscernible) of ESG. Jeff Ziglar – Emerging Sovereign Group: Hi, yes it’s actually, Jeff Ziglar from Emerging Sovereign Group. I wanted to ask two questions. Number one, given the press release on the Puerto Rico Highway and Transportation Authority, are oil tax increased and can you comment on your involvement in that process as was indicated in the press release. And number two, can you give us any update on the progress of the prepay negotiations and the forbearance agreement.

Yeah Jeff, it’s Bill speaking, with regard to the highways what you saw in the press release is consistent with the fact that yes we have been in communication. There were constructive conversations leading up to the legislation that were submitted and other than that there is not really any additional detail that I can give you. With regard to prepay as you know there was a preliminary schedule outlined with the forbearance and amendment during the summer, they had a Chief Restructuring Officer that is reviewing the prepay operations, I think in any meaningful level of detail, we won’t see anything until probably March of next year, I am sure along the way towards the end of this year, there may be some preliminary views but I don’t think we will see anything subsided until next year, and that’s the situation with regard to both of the strategies. Jeff Ziglar – Emerging Sovereign Group: Great, thank you.

And we have no further questions.

Alright thank you, and thanks to all of you who have joined us for today’s call. Please contact me directly, if you have any additional questions. We also recommend that you visit our website mbi.com for additional information on our company. Thank you for your interest in MBIA, good day and good bye.

Thank you. This does conclude today’s conference call, you may now disconnect.